The Impact Of Medical Bills From A Car Accident On Your Credit Score

A serious car accident can change your life in an instant. Beyond the physical pain and emotional stress, many crash victims face another long-term consequence they did not anticipate: damage to their credit score caused by unpaid or delayed medical bills. Even when another driver is clearly at fault, medical providers, insurers, and collection agencies often move faster than injury claims are resolved. As a result, accident-related medical debt can follow victims for years and affect their ability to obtain loans, housing, or even employment.

This blog explains how medical bills from a car accident can affect your credit, what the data shows about medical debt in the United States, recent changes to credit reporting rules, and practical steps injured victims can take to protect themselves.

“After a serious car accident, medical bills should not become a second injury. We regularly see clients whose credit is threatened because insurers delay payment while providers demand immediate reimbursement. Protecting a client’s financial future is just as important as pursuing compensation for their physical injuries.” — John J. Malm, Naperville car accident attorney

Medical Debt After Car Accidents

Medical debt is one of the most common forms of consumer debt in the United States, and car accident victims are particularly vulnerable. According to the Consumer Financial Protection Bureau (CFPB), medical debt is the single largest source of collections tradelines on consumer credit reports, affecting tens of millions of Americans. The CFPB estimates that approximately $88 billion in medical bills appears on consumer credit reports nationwide.

Motor vehicle crashes are a significant contributor to this problem. The National Safety Council reports that millions of people require medical treatment each year following motor vehicle accidents, generating billions of dollars in medical costs. Even insured drivers and passengers can be left with substantial out-of-pocket expenses such as deductibles, co-pays, and uncovered services.

Unlike credit card or loan debt, medical bills often arise unexpectedly and in large amounts. After a crash, victims may receive separate bills from emergency rooms, ambulance services, radiologists, surgeons, physical therapists, and specialists, each with its own billing timeline. When these bills are not paid quickly, they may be sent to collections before an injury claim or settlement is resolved.

How Medical Bills End up on Your Credit Report

Medical bills do not appear on your credit report immediately. However, they can still cause significant damage if not handled properly. The typical process works as follows:

• A medical provider sends a bill after treatment.
• If the bill is unpaid after a certain period, it may be transferred to a collection agency.
• Once in collections, the account can be reported to the major credit bureaus: Equifax, Experian, and TransUnion.

Historically, medical collections could remain on a credit report for up to seven years, even if the debt resulted from an accident caused by someone else. Although recent reforms have improved consumer protections, medical debt can still affect credit scores if victims are not proactive.

Recent Credit Reporting Changes for Medical Debt

In response to widespread concerns, credit reporting agencies and regulators have made changes to how medical debt is treated. These changes provide some relief but do not eliminate the risk entirely:

• The three major credit bureaus extended the waiting period before unpaid medical debt can appear on a credit report from 180 days to 365 days.
• Paid medical collections are no longer included on consumer credit reports.
• Medical collection debt under $500 is excluded from credit reports.

These reforms, announced in coordination with the CFPB, removed millions of medical collection accounts from credit reports. However, larger unpaid balances can still be reported and negatively impact credit scores.

For car accident victims, this means there is still a critical window where bills must be managed carefully, especially when liability or insurance coverage is disputed.

Why Car Accident Victims are at Higher Risk of Credit Damage

Car accident injury claims often take months or even years to resolve. During that time, medical providers expect payment regardless of fault. Several factors increase the likelihood that accident-related medical bills will harm credit:

• Liability disputes delay insurance payments.
• Health insurance may deny coverage or seek reimbursement later.
• Medical liens may be asserted against a future settlement.
• Victims may be unable to work, reducing their income.

Research shows that unexpected medical expenses are a leading cause of financial distress. The Federal Reserve has reported that a significant percentage of adults would struggle to cover an unexpected medical expense without borrowing or missing other bills.

When income drops and bills pile up, medical debt is often the first obligation to fall behind, placing credit scores at risk.

How Medical Collections Affect your Credit Score

Credit scoring models such as FICO and VantageScore consider collection accounts as negative information. While newer scoring models weigh medical debt less heavily than other types of collections, the impact can still be substantial:

• A single medical collection account can lower a good credit score by dozens of points.
• Multiple collection accounts can compound the damage.
• Lower credit scores can result in higher interest rates or loan denials.

According to the CFPB, consumers with medical collections on their credit reports are significantly more likely to have subprime credit scores compared to those without medical debt.

Common Debt Scenarios After a Car Accident

Medical debt and credit problems often arise in predictable ways after crashes:

• Emergency treatment is billed before insurance coverage is confirmed.
• Ambulance services bill separately and aggressively pursue collections.
• Out-of-network providers generate unexpected charges.
• Follow-up care continues long after initial insurance payments are exhausted.

In many cases, victims assume the at-fault driver’s insurance will “take care of everything,” only to discover that bills have already been sent to collections.

Practical Steps to Protect your Credit After a Car Accident

If you have been injured in a crash, there are proactive measures you can take to reduce the risk of credit damage:

• Notify medical providers that your injuries are accident-related and that a claim is pending.
• Request written confirmation before accounts are sent to collections.
• Keep detailed records of all medical bills and correspondence.
• Monitor your credit reports regularly for errors or premature reporting.
• Consult an experienced Illinois car accident attorney before agreeing to medical liens or payment plans.

Taking these steps early can prevent long-term financial consequences while your injury claim is ongoing.

The Role of Personal Injury Claims in Addressing Medical Debt

A successful car accident injury claim can provide compensation for:

• Past and future medical expenses
• Lost income and reduced earning capacity
• Pain and suffering
• Out-of-pocket costs related to treatment

However, settlements often occur long after bills are due. An experienced personal injury attorney can help coordinate communication with medical providers, challenge improper billing, and pursue full compensation so that medical debt does not permanently harm your financial future.

Frequently Asked Questions about Medical bills, Car Accidents, and Credit Scores

Q: Can medical bills from a car accident really hurt my credit?
A: Yes. If unpaid medical bills are sent to collections and exceed reporting thresholds, they can appear on your credit report and lower your credit score.

Q: How long before medical debt shows up on my credit report?
A: Under current rules, unpaid medical debt generally cannot be reported until at least 365 days after the bill becomes delinquent.

Q: If I pay the medical bill later, will it still hurt my credit?
A: Paid medical collections are no longer included on credit reports, which is a significant improvement for consumers and crash victims.

Q: What if the accident was not my fault?
A: Fault does not stop medical providers from billing you. You may still need to manage bills while your injury claim is pending.

Q: Should I talk to a lawyer about medical bills after a crash?
A: Yes. An Illinois injury attorney can help protect your rights, coordinate medical billing issues, and pursue compensation that addresses both your injuries and financial harm.

Contact the 5-Star Rated Illinois Car Accident Injury Lawyers at John J. Malm & Associates

Car accident injuries can leave lasting physical and emotional scars, but damage to your credit does not have to be one of them. Medical debt is one of the most common and misunderstood consequences of a crash, and without guidance, it can quietly undermine your financial stability for years. Acting early, by understanding your rights, monitoring your credit, and seeking experienced legal help, can make a critical difference.

If you or a loved one has been injured in a car accident and is facing mounting medical bills or credit concerns, the top-rated Illinois car accident attorneys at John J. Malm & Associates is here to help. Our firm has extensive experience handling serious injury claims and addressing the financial fallout that follows. Contact us today for a confidential consultation to learn how we can protect your rights, pursue full compensation, and help you move forward after a crash.